WHEAT MARKET SITUATION IN KOREA

WHEAT MARKET SITUATIONIN

KOREA

Won Bang Koh, Ph.D.

Country Director

U.S. Wheat Associates

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WHEAT FLOUR CONSUMPTION

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Confectionery9.4%Restaurant

(noodle shop)8.0%

Home use7.7%

Feed 6.4%

Export5.8%

Soy sauce3.9%

Brewery1.5%

Industrial use1.3%

Bakery13.6%

Others4.2%

Extruded chewy cake

0.9%

Noodles37.3%

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WHEAT IMPORT OF KOREA BY ORIGIN DURING CY2007

Origin Class Qnty(MT) MS (%) Uses

USA SW 584,917 28.3 Cakes, All-purpose

WC - - Cakes

SRW 5,063 0.2 Biscuits (confectionery)

HRW 242,224 11.7 Noodles, All-purpose

HW - - Noodles, Steam-buns

HRS (DNS) 343,342 16.6 Bread & rolls

Subtotal 1,175,546 56.8

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Origin Class Qnty(MT) MS(%) Uses

Australia AS 2,131 0.1 Puffing snacks

ASW 717,263 34.7 Noodles

AH 79,187 3.8 Noodles, Bread

Subtotal 799,187 38.6

Canada CWRS 94,908 4.6 Bread & rolls

Grand Total 2,069,641

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WHEAT MARKET SHARE BY ORIGIN

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Calendar Year

Mar

ket

Shar

e (%

)

USAAUSTRALIACANADA

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Wheat Pricing

– USW:Free marketing systemTighter specification required with premium

– AWB:Monopoly marketing systemPrice negotiation (Undercutting geared with US wheat price;

US$2 to 5/MT- ASW vs HRW, US$10 to 24/MT- AH vs HRS)Cheaper ocean freight rate ($2/MT) No quality specification needed

CURRENT CONSTRAINTS

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Wheat Quality

– Quality Consistency:

Dough stability

Kernel vitreousness

– Functional Quality:

Noodle properties (ash, color and starch)

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Wheat Safety – Pesticide MRLs (ppm):

CODEX USA KOREA Wheat Flour Wheat Flour Wheat Flour

Malathion 0.5 0.2 8.0 - 8.0 1.0

Chlorpyrifos Methyl (Reldan) 10.0 2.0 6.0 - 6.0 2.0Chlorpyrifos 0.5 0.1 0.5 - 0.1 0.02

Fenitrothion - 2.0 - - 6.0 1.0

* A total 20 wheat shipments showed higher than CODEX recommendation 0.5 ppm MRL in malathion residue during

2001 - 2007.

– Vomitoxin: – GM wheat:

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ACTIVITES TO ENHANCE OR HOLD USW MARKET SHARE

US Wheat Quality Improvement Symposium

– Quality discussion between US wheat breeders and Korean millers as well as researchers of wheat-based food industries

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• Overseas Varietal Analysis (OVA) Program

– Summaries of varietal quality evaluation data from overseas users and attendant ARS laboratories for wheat breeders, ARS and state wheat quality laboratories, wheat producers, the grain trade and overseas cooperators.

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HW Functional Quality Improvement

– APC (Asian Products Collaborative) Program:

• Noodles and steam buns flour development team to U.S.• Laboratory test at Wheat Marketing Center in Portland, OR• HW sample laboratory evaluation tests at KBS and WFRL in

Korea HW samples evaluated as suitable varieties for Korean

noodles during past years;

Platte- ColoradoID377S- IdahoTrego- Kansas Blanca Grande- Washington & California Intrada- OklahomaAlturas (SW)- Idaho

• Commercial milling and noodle production tests in Korea

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• Short Course Training in the US

– Millers & Noodle Researchers: WMC, NCI, IGP

– Bakers: AIB– Wheat Import Managers: NCI, IGP– Contracting for Wheat Value Workshop:

WMC– Durum Milling Short Course: NCI– Pasta Raw Material & Processing Course: NCI– Wheat Laboratory Internship: WMC

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• Seminar and Technical Consultation– Crop Quality Seminar– Wheat & flour short course for flour users– Wheat Foods Research Seminar– Special lectures for university and graduate

school students– In-plant consultations for milling and wheat-

based foods industries– Baking seminars in cooperation with KBA and

KBS– AIB/Korea Alumni Assn. Biennial Seminar

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• Trade Teams to the US

– Presidents, Import directors, Plant managers and R&D managers of milling industry

– Delegations of noodle and baking industries– Governmental organization teams– HW & Selenium Wheat Crop Survey Team– PNW HW End-users Delegation

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Thank You